IN February 1948 a group of Empire journalists asked me to
comment on the economic situation in the form of replies to
a questionnaire which they had drawn up. The result, as
subsequently published in the MelbourneArgus, was as follows.

Question No. 1: Sir Stafford Cripps states that the position has
deteriorated greatly in the last six months. Is it not likely that it
will continue to deteriorate? By that I mean that most of the
countries in the sterling area will be unable to close the gap in their
balance of payments by existing methods.

Reply No. 1: I must not presume to interpret Sir Stafford, but
I may point out that the word 'deteriorate' is ambiguous.
According to the recent White Paper (Cmd. 7324) the rate at
which the United Kingdom was losing net gold and dollar
reserves declined progressively from August to December, though
there seems reason to fear that the decline did not continue in
January and February. In this sense the position has not deteriorated in the last six months, though of course in another sense, so
long as the drain on net reserves continues, the position continues to deteriorate.

I should have thought there was still reason to hope that as the
measures already taken in the United Kingdom and the other
parts of the Sterling Area become increasingly effective the rate
of net loss will decline; but I see no hope of its sinking to zero in
the near future in default of Marshall aid.

Question No. 2: Do you regard the Marshall Plan as an effective
instrument for the economic recovery of Western Europe, or could
it not be a mere repetition of the 1946 American loan to Britain?

Reply No. 2: The question carries a certain implication that the
American loan to Britain has been ineffective as an instrument
of recovery. To this I would not agree. Some of the conditions

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